A lease agreement in Thailand enables a foreigner to maintain a long term interest in the country through land. Lease permitting, a house can be constructed on the land and registered in the foreigner's name.
A lease arrangement is suited to a number of situations, including:
- Someone who wants to retire in Thailand and construct a house of their choosing on land in a specific area.
- A person who wants to buy land for their Thai partner but wants some control over the land during their remaining years (in this case the Thai spouse would buy the land and lease it to the foreign spouse).
- A couple who want to live near Thai family and decide to lease land from a member of family.
I've discussed land and property ownership previously, and within that briefly covered the lease arrangement. However, it's a subject worthy of its own post – since it begs many questions. So let's look at this in greater detail, without any of the legal jargon you'll find elsewhere.
Why Get a Land Lease in Thailand?
Direct property ownership outside of a condo or housing development purpose built for ownership isn't permitted for foreigners.
Having a lease, typically of 30 years, means you can build a home on the land and live there for the term. Please note that the lease agreement must stipulate that a home can be built on the land.
Moreover, before entering a lease agreement, you must ensure that the land has a deed that permits a dwelling. Some land is reserved for agriculture. See here.
Can a Lease Be Renewed?
30 years is the maximum term. However, a clause can be inserted in the contract that provides the option for a renewal. The renewal must be made before the lease term expires.
Does a Lease Renew Automatically?
No. Even if the option to renew is stated in the contract the lease does not renew automatically.
The renewal clause is considered an option or contract obligation, not a legal right. Therefore both parties have to actively seek to renew the lease and, even then, the final decision is up to the land registrar.
What's the Point of a Lease if You Never Own The Land?
It's a fair point, and it depends on your age and financial situation.
Leasing land will enable you to build a home in the style of your choosing, and fairly cheaply too. You can build a nice house in Thailand for 3 million Baht, and for some that's very affordable. Renting the land will be cheaper than buying it outright,
Moreover, most of those who retire to Thailand do so when over 50 years old, so a 30-year lease with an option to renew works out quite nicely. If you live out your days in the house for 20-30 years, then you've had good use out of it.
What Happens to My Lease if I Die?
It reverts to the lessor, unless you include family members in the contract as co-lessees. That way your family members can carry on the full term of the lease period, should they want to.
What if the Lessor Dies?
The lease will remain valid if the lessor dies, or if the land is sold.
How do I Lease Land in Thailand?
It's pretty straight forward to lease land. You make an agreement with the lessor, ironing out any specific arrangements such as rental costs, building permissions, term, etc., and then go to a lawyer to have the contract drawn up.
If the lease term is to be more than 3 years, then you will need to register it at the Land Office. The lease will then be fixed to the land deed and held at the Land Office.
You will need to apply for a permit to build a house on the land. The property will be registered in your name, as the owner.
Can I Sublet or Transfer My Land Under a Lease?
Subletting to a third party, or transferring ownership of the lease, is not permitted unless stipulated in the lease contract.
Are There Any Fees Involved?
Yes. The Land Office will charge 1% of the rental value of the lease to register the lease.
If you plan to use the land for commercial purposes, then property tax will be due at of 12.5 % of the annual rental value, or the annual assessed rental value, whichever is higher.
Can I Get a Visa Based On Leasing Land?
No. Having a lease or owning a home doesn't guarantee you any sort of visa. You would still need to apply for a retirement visa, a visa extension based on marriage, an Elite visa or other.
Got a specific question I haven't covered here? Leave it down below.
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